Limited company or personal name: five questions before your next purchase

Published 16 August 2026 · Written by the Lar founder

Ten years ago the default way to buy a rental property in Scotland was in your personal name. Today it is through a limited company. The companion guide on the limited company shift covers why.

But a default is not a rule. The right answer for your next purchase depends on your circumstances.

These five questions frame the decision.

1. Do you expect to buy more than two more BTLs in the next five years?

The more you plan to grow, the harder Section 24 bites. Since 2020, higher-rate landlords who own property personally cannot deduct mortgage interest as a straight expense. You get a 20% basic-rate credit instead.

Inside a company, interest is still an ordinary expense. The more properties you add, the more that difference is worth.

2. Are you already a higher or top-rate Scottish taxpayer?

Scottish rental income in the higher-rate band is taxed at 42%, with bands climbing to 48%. Corporation tax sits between 19% and 25% depending on profit.

The wider the gap between your personal rate and the corporation tax rate, the stronger the case for a company, before anything else is weighed in.

3. Do you plan to reinvest rental profits, or draw them as income?

If you leave profits in the company to fund the next purchase, they are taxed at the corporation tax rate along the way. If you draw them out to live on, dividend tax lands on top.

Reinvesting favours the company. Living off the income is a closer call, and it is exactly the case your accountant should model both ways.

4. Do you want to bring in a spouse, a family member, or a co-investor?

Shares are easy to split, gift or transfer. A property in your own name is not. Moving it means a full conveyance, with the transaction tax and legal costs that come with it.

If shared ownership or a gradual handover is anywhere in your plan, shares give you room to move.

5. Is your intended hold ten years or more?

A company costs more in year one. Setup, accountancy fees and the extra record-keeping all land early.

Over a long hold, those costs fade and the tax advantages build. Over a short one, they may never pay for themselves. A quick flip is the one case where buying personally can still win cleanly.

The operational bit nobody mentions

If your portfolio already runs on a mix of personal and company ownership, the hardest part is not the tax. It is keeping track of which certificate, which mortgage, which insurance policy and which bank account belongs to which owner.

That is a problem Lar is designed to solve. It understands who owns what across your portfolio, and keeps the picture straight for you and your accountant.

Nothing in this guide is tax or legal advice. The right structure depends on your circumstances; take advice from your accountant before committing to a purchase vehicle.